Shamika Ravi, a member of the Economic Advisory Council to the Prime Minister (PM-EAC), stated at Moneycontrol’s Policy Next session on August 25 that some of the administration is against price control measures. She continued by saying that these actions are not long-term fixes and might not last for a very long time.
Ravi’s remarks come at a time when the central government has implemented a number of measures to keep a lid on food prices, including lowering retail prices for specific stocks of tomatoes via agencies, enforcing an export ban on a particular category of rice, and selling wheat under the open market sale scheme to lower the price of essential commodities.
India’s headline retail inflation reached a 15-month high of 7.44 percent in July due to a rise in vegetable prices and ongoing price pressure on important commodities like pulses and cereals. When the numbers for August are revealed on September 12, economists anticipate that inflation will have remained above 7 percent in August as well.
Additionally, Ravi noted that not all inflation is detrimental. Certain types of inflation also cause economic redistribution, in this case in favor of the producers. She continued by saying that India has moved past the point where food security was a major issue and that the lack of effective distribution mechanisms is to blame for the periodic shocks.
Regarding worries that actions taken frequently to safeguard consumers may have an adverse effect on farmers’ interests, Ravi stated that farmers’ incomes are currently much more steady. In order to safeguard the specific community from such shocks, she pointed out that the government had actually tried to enact the three farm legislation, which were eventually dropped owing to resistance.
Regarding India’s impressive GDP growth, Ravi noted that although the nation has historically had growth rates of about 6-7 percent, similar growth rates in the middle of a global slowdown encourage optimism.
Ravi continued by saying it is not surprising that several international institutions have increased their predictions for India’s GDP growth. Due to the blowout growth number for January-March, the International Monetary Fund (IMF) increased its GDP growth prediction for India for 2023–24 from 5.9 percent to 6.1 percent.
In line with estimates, the Indian economy expanded by 6.1 percent between January and March, according to official figures released on May 31. As a result, the statistics ministry’s updated estimate of 2022–23’s full-year GDP growth is 7.2 percent, which is 20 basis points higher than the prior estimate of 7 percent.
Even though many of the world’s major economies are experiencing a downturn, the Indian government plans to sustain the momentum for the current fiscal year with GDP growth predicted to increase by 6.5 percent.